Fortnite FTC

Epic Must Pay $520 Million Over FTC Charges

Epic Games was charged more than half a billion dollars in relief by the Federal Trade Commission, the governing body announced on Twitter.

Per the ruling, the FTC against Epic involves two separate record-breaking settlements. As part of a federal court order filed by the Department of Justice on behalf of the FTC, Epic must pay $275 million for violating the COPPA(Children’s Online Privacy Protection Act) Rule—the most significant penalty ever obtained for violating an FTC rule.

The FTC indicates Epic violated the COPPA Rule by “collecting personal information from children under 13 who played Fortnite, a child-directed online service, without notifying their parents or obtaining their parent’s verifiable consent.”

Furthermore, the FTC accuses Epic used and “deployed design tricks, known as dark patterns, to dupe millions of players into making unintentional purchases.” In a separate complaint, the FTC says Epic’s use of dark patterns tricked players into making purchases by “counterintuitive, inconsistent, and confusing button configuration,” indicating players bought downloadable content when waking up their console from sleep mode or in a loading screen, or pressing a button when attempting to preview an item.

Using dark patterns, Epic allowed children to purchase V-Bucks without parental consent or cardholder action up until 2018 before parents complained that their children racked up hundreds of dollars in charges. Epic would lock any account of users who disputed the unauthorized charges.

Epic ignored more than one million user complaints and employee concerns while also internally testing to obscure the cancel and refund buttons to make them more difficult to find.

As a result of these charges, Epic must pay $245 million, which will be used to provide refunds to consumers. The proposed administrative order prohibits Epic from charging consumers through the usage of dark patterns or charging consumers without obtaining consent. The order also prevents Epic from banning any account which disputes unauthorized charges.

Epic Games responded to the report by saying that  “No developer creates a game with the intention of ending up here,” the company said. “The video game industry is a place of fast-moving innovation, where player expectations are high and new ideas are paramount. Statutes written decades ago don’t specify how gaming ecosystems should operate. The laws have not changed, but their application has evolved and long-standing industry practices are no longer enough. We accepted this agreement because we want Epic to be at the forefront of consumer protection and provide the best experience for our players.

“Over the past few years, we’ve been making changes to ensure our ecosystem meets the expectations of our players and regulators, which we hope will be a helpful guide for others in our industry.”